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Sky-mobi's CEO Discusses F1Q2013 Results - Earnings Call Transcript

During the quarter, we shifted internal resources away from our feature phone business to focus on our Android platform. We began outsourcing a portion of our feature phone music platform to a partner and reduced a number of new game titles available in feature phone application store. Going forward, we will devote only the minimum of resources necessary to maintain our feature phone business.

Our mobile community also saw a decline in the number of active members due to the overall market decline to feature phones. Despite this, total revenue from the mobile community rose almost 60% due to the strong performance of our mobile social games. As we mentioned in our last call, we are repositioning the mobile community towards revenue-generating mobile social games and away from the free social functions. We launched a total of six new mobile social games this quarter, one of which had its revenue triple over three short months and is quickly approaching 10% of our social game revenue. We have another five mobile social games in the pipeline for the remainder of this calendar year.

Our new relationship with China Mobile is going well, particularly in the area of mobile gaming as we directly operate this platform on behalf of China Mobile, which means we have much higher payment efficiency. Going forward, we will continue to optimize the feature phone products and operations so that this business continues to provide a strong source of cash flow to support our growth in the smartphone market.

Now I want to talk about our smartphone strategy. In terms of smartphones, we have made excellent progress in penetrating this emerging market since launching our new Android platform at a global mobile Internet conference in Beijing in May. We have already entered into agreements with 50 handset manufacturers to pre-install our app store PC shield browser mobile game competition platform. This quick pace of adoption by industry players is proof of commercial competitiveness of our product and the monetization capability in China. We expect to continue our rapid progress by adding more manufacturers once they begin shipments over the next few quarters. We are confident we will become one of the top smartphone players in China by the end of this year.

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